The yuan declined slightly on Wednesday morning ahead of a flurry of potentially market-moving events in several major economies today.

The offshore yuan in Hong Kong fell for a third day, down 0.03 per cent, or 21 points, to trade at 6.9012 as of 10.55 am. Onshore yuan in Shanghai also slipped for a third straight day, slipping 0.03 per cent, or 19 points, to 6.9156.

The People’s Bank of China guided the midpoint rate up by 3 basis points to 6.9115. Traders in the mainland are allowed to trade the currency within a 2 per cent range of the guided price.

Chinese Premier Li Keqiang said on Wednesday that in the event of a trade war with the US, it would be primarily American enterprises that suffer. In his annual news conference at the end of the National People’s Congress, Li said GDP growth of 6.5 per cent is not a low target and achieving it would be no easy task.

The US Federal Reserve is expected to raise its key interest rate later today at the end of a two-day meeting of its policy-setting committee.

“Despite a likely faster pace of US Fed rate hikes this year, the US dollar has lost some of its strength since the end of last year,” said UBS economist Wang Tao in a report. “We now also think that major US-China trade frictions may be delayed and played outside of the dollar-yuan arena.

“These factors and China’s tighter capital outflow controls will make it easier to manage Chinese yuan stability.” UBS believes the yuan is unlikely to end 2017 beyond 7.15 versus the dollar, higher than its previous estimate of 7.3.

The dollar was slightly down on Wednesday morning against a basket of its major peers as investors priced in the near-certainty of a rate rise being announced later today. The dollar index had dropped 0.01 per cent to 101.69 as of 10.55 am.

Traders will be watching elections in the Netherlands, which get under way today – the first of three major elections in Europe this year.

The Bank of Japan commences its two-day monetary policy meeting today. The yen was 0.01 per cent lower at 114.87.

On Thursday the Bank of England will announce its rate decision. The British pound strengthened 0.02 per cent to 1.2155 against the dollar, while the euro was 0.13 per cent up at 1.0615.